Home Depot was a mistake but selling it now would compound it. Why we're hanging on

Key points

• Home Depot shares on Tuesday worked their way modestly higher after a down open on a quarterly update that was just OK and a status quo outlook.
• Revenue for the first quarter ended May 3 advanced 4.8% year over year to $41.77 billion, outpacing the $41.52 billion expected by LSEG.
• Earnings per share (EPS) declined 3.7% to $3.43, but exceeded the $3.41 analyst estimate.
• HD YTD mountain Home Depot YTD We're sticking with Home Depot for now, but the unfavorable rise in market interest rates leaves us with no choice but to cut our price target on the stock to $360 per share from $420. Investors are not going to pay up as much for a housing play tied to mortgage rates when rates are rising.
• We're reiterating our hold-equivalent 2 rating.